French aerospace group Safran is ready to pay 4 billion euros ($5.74 billion) for Italy’s Avio, Reuters reported, citing an article in the weekly La Lettre de l’Expansion. No other details were given, but Safran shares rose as much as 5.7% to a near 11-year high after the report’s publication, Reuters said. Avio is majority owned by private equity group Cinven.
(Reuters) – French aerospace and defence group Safran is ready to pay 4 billion euros ($5.74 billion) for Italy’s Avio, weekly La Lettre de l’Expansion reported, pushing Safran shares to a decade high.
The article did not cite sources and gave no other details. Safran said it would not comment on market rumours.
Safran shares rose as much as 5.7 percent to a near 11-year high in brisk volumes after the report’s publication. At 1117 GMT, the stock was up 3.4 percent, to 29.20 euros.
A source familiar with the situation said the report of a possible Safran bid for Avio was wrong.
“(4 billion) seems very expensive; had 2 billion euro valuation in mind… Bear in mind Safran could use up to 3.5 billion euros in cash for acquisition without raising capital,” a Paris-based trader said.
Avio, a propulsion specialist, is based near Turin and last year made revenue of 1.75 billion euros. It is majority owned by private equity group Cinven, while Italy’s Finmeccanica owns a 15 percent stake.
(Reporting by Lionel Laurent and Blaise Robinson; Editing by Erica Billingham )